Oil Prices Surge To 18-Month High Amid Global Supply Concerns

Oil Prices Surge To 18-Month High Amid Global Supply Concerns...

Oil prices jumped to their highest level since September 2024 on Tuesday, with Brent crude topping $95 per barrel as geopolitical tensions and production cuts squeeze global supplies. The surge is reigniting inflation fears and putting pressure on US drivers ahead of the summer travel season.

West Texas Intermediate (WTI), the US benchmark, climbed 3.2% to $91.78 per barrel in early trading - the sharpest single-day gain this year. The spike comes as OPEC+ extends voluntary output cuts through June and Ukrainian drone strikes disrupt Russian refinery operations.

Analysts at Goldman Sachs warned this week that Brent could reach $100 by May if disruptions continue. "We're seeing a perfect storm of constrained supply and rising demand," said energy strategist Rebecca Babin. "The market is pricing in significant risk premiums."

The price surge is trending nationally as Americans face rising gas prices ahead of peak driving season. AAA reports the national average for regular gasoline hit $3.58 per gallon Monday, up 12% from February lows. California drivers are paying over $4.80 at many stations.

White House Press Secretary Karine Jean-Pierre told reporters Tuesday the administration is "monitoring the situation closely" but ruled out tapping strategic reserves. Energy Secretary Jennifer Granholm is scheduled to meet with oil executives later this week to discuss production levels.

The price jump comes at a sensitive time for the Federal Reserve, which is weighing interest rate cuts amid stubborn inflation. Higher energy costs could delay anticipated relief for consumers and complicate the economic outlook ahead of November's elections.

Traders will watch Wednesday's EIA inventory report for signs of tightening US stockpiles. Meanwhile, continued Houthi attacks on Red Sea shipping and Venezuela's struggling oil industry add further uncertainty to global markets.